Go-Ahead Group has received a lower than expected fine from the government over the mishandling of its former London and South Eastern Railway franchise.
The Newcastle-based bus and train operator was issued with a £23.5 million penalty by the Department for Transport, which was lower than the £30 million provision made in Go-Ahead’s accounts published last month for the year ending July 3, 2021.
The amount will be settled from the restricted cash balance of the former franchise, Go-Ahead said yesterday. The shares responded positively to the resolution of the fine, closing up 101p, or 16.3 per cent, at 721p.
The department did not renew Go-Ahead’s franchise last September, with the government stepping in to run operations as the “operator of last resort”. This was the result of “serious errors” in London and South Eastern’s dealing with the department over several years. The network stretches across southeast England, including London, Kent and East Sussex.
The department said yesterday that the former franchise “had deliberately concealed over £25 million of historic taxpayer funding relating to HS1, which should have been returned to the taxpayer”.
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Grant Shapps, transport secretary, said: “I took decisive action and did not renew the contract with South Eastern following this appalling breach of trust.”
The department said it was recovering £64 million from London and South Eastern in relation to the breaches of the franchise agreement, and the fine was in addition to this amount.
Shapps said the former franchise’s behaviour was “simply unacceptable and this penalty sends a clear message that the government, and taxpayers, will not stand for it”.
A Go-Ahead spokesman said: “We accept this penalty. Since these events came to light, our corporate governance procedures have been enhanced and the group is under new leadership.”
The company employs more than 27,000 people across its bus and rail businesses in the UK, Singapore, Ireland, Norway and Germany.
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In Britain it runs the country’s largest passenger franchise, GTR, which covers Southern, Gatwick Express, Great Northern and Thameslink. This is managed through its 65 per cent owned subsidiary Govia, which is 35 per cent owned by Keolis UK.
